1. WAREHOUSING
MANAGEMENT
HS 1133518 WEEK 4

2. • Part of firms logistics system that stores products at and
between point of origin and point of consumption.
• Term “Warehousing” is referred as transportation at zero
miles per hour
• Warehousing provides time and place utility for raw
materials, industrial goods, and finished products, allowing
firms to use customer service as a dynamic value-adding
competitive tool.

3. THE ROLE OF THE WAREHOUSE IN THE
LOGISTICS SYSTEM
• The warehouse is where the supply chain holds or
stores goods.
• Functions of warehousing include
• Transportation consolidation
• Product mixing
• Docking
• Service
• Protection against contingencies

4. TYPE OF WAREHOUSING
• Public Warehousing
• Private Warehousing
• Contract Warehousing
• Multi-client Warehousing

5. DESIGN CONSIDERATION
Ideal Facility for Pure Supplier
Consolidation
(Full Pallet Movement)
Warehouse Space
Requirements

6. PRINCIPLES OF WAREHOUSE LAYOUT
DESIGN
Use one-story
facilities
Move goods in a
straight line
Use efficient
materials-handling
equipment
Use an effective
storage plan
Minimize aisle space
Use maximum height
of the building

7. WAREHOUSE PROCESS
Put-away
•Identify Product
•Identify Product Location
•Move Products
•Update Records
Storage
•Equipment
•Stock Location
– Popularity
– Unit Size
– Cube
Shipping Preparation
•Packing
•Labeling
•Stacking
Order Picking
•Information
•Walk & Pick
•Batch Picking
Shipping
•Schedule Carrier
•Load Vehicle
•Bill of Loading
•Record Update
RECEIVING
•Schedule Carrier
•Unload Vehicle
•Inspect for damage
INP
UT
OUT
PUT

8. OBJECTIVES OF EFFICIENT
WAREHOUSE OPERATIONS
• Provide timely customer service.
• Keep track of items so they can be found readily &
correctly.
• Minimize the total physical effort & thus the cost of
moving goods into & out of storage.
• Provide communication links with customers

9. • Benefits of Warehouse Management
• Provide a place to store & protect inventory
• Reduce transportation costs
• Improve customer service levels
• Complexity of warehouse operation depends on the number of
SKUs handled & the number of orders received & filled.
• Most activity in a warehouse is material handling.

10. • Capital costs
— Costs of space & materials handling
equipment
• Operating costs
— Cost of labor
— Measure of labor productivity is the number of
units that an operator can move in a day
COSTS OF OPERATING A WAREHOUSE

11. WAREHOUSE ACTIVITIES
• Receive goods
• Identify the goods
• Dispatch goods to storage
• Hold goods
• Pick goods
• Marshal shipment
• Dispatch shipment
• Operate an information system

12. • Accepts goods from
‒ Outside transportation or attached factory &
accepts responsibility
• Check the goods against an order & the bill of
loading
• Check the quantities
• Check for damage & fill out damage reports if
necessary
• Inspect goods if required
Receive goods

13. ‒ items are identified with the appropriate stock-keeping
unit (SKU) number (part number) & the quantity received
recorded
Identify the goods
Dispatch goods to storage
‒ goods are sorted & put away
Hold goods
‒ goods are kept in storage & under proper protection until
needed

14. Pick goods
‒ items required from stock must be selected
from storage & brought to a marshalling area
Marshal the shipment
‒ goods making up a single order are brought
together & checked for omissions or errors; order
records are updated

15. Dispatch the shipment
‒ orders are packaged, shipping documents are
prepared, & goods loaded on the vehicle
Operate an information system
‒ a record must be maintained for each item in
stock showing the quantity on hand, quantity
received, quantity issued, & location in the
warehouse

16. MAXIMIZE PRODUCTIVITY & MINIMIZE
COST, WAREHOUSE MANAGEMENT MUST
WORK WITH THE FOLLOWING
• Maximize use of space
– space is the largest capital cost
• Effective use of labor & equipment
– labor is the largest operating cost
– material handling equipment is the second largest
capital cost

17. FACTORS INFLUENCING EFFECTIVE USE
OF WAREHOUSES
• Cube utilization and accessibility
• Stock location
• Order picking and assembly
• Physical Control & Security - Elements

18. CUBE UTILIZATION AND
ACCESSIBILITY
‒ Goods stored not just on the floor, but in the cubic
space of the warehouse; warehouse capacity depends
on how high goods can be stored
‒ Accessibility means being able to get at the goods
wanted with a minimum amount of work

19. CUBE UTILIZATION AND
ACCESSIBILITY CONTINUED…

20. Stock Location
• Objectives
– To provide the required customer service
– To keep track of where items are stored
– To minimize effort to receive, put away, and
retrieve items
• Basic Stock Locating Systems
– Group functionally related items together
– Group fast-moving items together
– Group physically similar items together

21. • Fixed Location
– SKU assigned a permanent location, & no other items are stored there
– Fixed-location systems usually have poor cube utilization
– Usually used in small warehouses; throughput is small, & there are few SKUs
• Floating (Random) Location
– Goods stored wherever there is appropriate space
– Advantage is improved cube utilization
– It requires accurate and up-to-date information
– Warehouses using floating-location systems are usually computer-based
Stock Location
continued…

22. Stock Location
continued…
• Two other systems sometimes used are
– Point-of-use storage
• Inventory stored close to where it will be needed
• Used in repetitive manufacturing & JIT systems
– Central storage
• Contains all inventory in one central location

23. • Advantages of Point-of-use Storage
– Materials are readily accessible to users
– Material handling is reduced or eliminated
– Central storage costs are reduced
– Material is accessible all the time
Stock Location
continued…

24. • Advantages of Central Storage
– Ease of control
– Inventory record accuracy is easier to maintain
– Specialized storage can be used
– Reduced safety stock, since users do not need to carry their own safety stock
Stock Location
continued…

25. ORDER PICKING AND
ASSEMBLY
• When an order is received, items must be
obtained from the warehouse, grouped, &
prepared for shipment, systems used
– Area system
– Zone system
– Multi-order system

26. ORDER PICKING AND
ASSEMBLY CONTINUED…
• Area system
– Order picker circulates throughout warehouse selecting
items on an order -- order is ready to ship when order
picker is finished
• Zone system
– Warehouse is divided into zones, & each picker works
only in an assigned zone -- order is divided by zone, &
the items from each zone are sent to the marshaling
area

27. ORDER PICKING AND
ASSEMBLY CONTINUED…
• Multi-order system
– Same as the zone system, except that each picker
collects items for a number of orders at the same
time

28. PHYSICAL CONTROL & SECURITY - ELEMENTS
• Good part numbering system
• Simple, well-documented transaction system
– Identify the item
– Verify the quantity
– Record the transaction
– Physically execute the transaction
• Limited access
– Inventory must be kept in a safe, secure (locked) place
with limited general access
• Well-trained workforce

29. VIDEO
http://www.youtube.com/watch?v=Cbj2d_0
w24E

30. Question
s ?

31. THANK YOU